A plan by mainland conglomerate China International Trust & Investment Corp (Citic) to consolidate its mainland and Hong Kong securities operations has hit a regulatory grey area, a senior Citic Securities official says.
Under the now stalled plan, Citic Securities - the larger of two mainland-listed brokerages - will seek to buy a controlling stake in its Hong Kong sibling Citic Capital Markets (Holdings) from the latter's two major shareholders.
'We've consulted the China Securities Regulatory Commission (CSRC) but have not officially submitted an application [for the acquisition],' the Citic Securities official said. 'As the CSRC has yet to introduce policies regarding such cross-border acquisitions, we will have to wait.'
This was the second attempt in Citic's blueprint for integrating its mainland and Hong Kong financial services operations to hit regulatory roadblocks.
Last week, news surfaced that the Hong Kong Monetary Authority had thwarted an attempt by Beijing-based Citic Industrial Bank to buy a controlling stake in its Hong Kong sibling Citic Ka Wah Bank.
Both are also said to be part of Citic's efforts to consolidate its banking, brokerage, asset management and insurance operations into Citic Holdings, China's first financial holdings company.